Bookkeeping Supporting Documentation: Here’s What You Need To Know
Doing business in Canada means you need to pay your taxes. A big part of that is understanding the best ways to keep records and books of account. Most people in the corner store or the corner office understand about supporting documentation but not everyone is clear on how long you need to keep these important papers, in what format you need to keep them in and for how long you need to hold onto them .
Generally, the consensus from our bookkeeping Toronto professional services is you should hang onto these records for six years. The Income Tax Act (ITA) is clear that all different kinds of documentation including accounting records, cheques, vouchers and receipts should be kept for this period of time from the end of the last taxation year.
Keeping Pace With Innovation
There have been some interesting changes that keep pace with innovation. For example, since 1998 in Canada it’s possible to store some of the supporting documents that you’ll need electronically as long as they remain in a readable type format. However, there are a few interesting sidebars that you should be aware of when you’re a business owner in Canada looking to store some of your supporting documents in cyberspace.
For example, the ITA requires that you keep books and electronic records in Canada. It’s not good enough to have digital receipts and information accessible, they need to be stored inside our national boundaries at the same time.
Having a good system for keeping those records is half the battle. Our Toronto bookkeeping experts will be able to outline some tips and procedures that will give you directions to follow. It’s a good starting point to understand the kind of record-keeping that the CRA recognizes and these different forms include:
- Supporting records, books and any other documents that come in paper format.
- The same records that were originally stored on paper and transferred into electronic format. Remember these need to be readable.
- The above mentioned records stored originally electronic formats.
As your bookkeeping Toronto professional of choice, we can also help you with any and all transitions from paper to electronic filing. It is also important if any of these records were lost or destroyed that you report this to your local tax office as soon as possible and do your best to re-create the files.
Call us today for more information on book keeping in Toronto. We provide book keeping services throughout the GTA including: Aurora, Newmarket, Richmond Hill, Markham, Mississauga, Vaughan, Scarborough, Maple, Thornhill, Woodbridge, and Kleinburg.